Is it not the case that any limited gain from changes in direct taxation for those on low to moderate incomes will be wiped out by the water tax in January? Changes in the budget are extremely modest. A single worker earning €15,000 will see a weekly €2 rise in take-home pay, which is barely the price of a cup of coffee. A married couple earning €15,000 with one income and two children will see a €4 increase in their wages per week, which is barely enough for two cups of coffee. Is it not the case that the Government panicked after the massive demonstration combined with the result of the two recent by-elections on Saturday and responded with a series of Mickey Mouse measures to curtail reaction?

The Minister for Finance announced tax relief on water charges at the standard rate of 20% up to a maximum water charge of €500 per household per year. Is this an acceptance by the Government, contrary to what we have been told repeatedly, that some households will pay up to €500 a year in water charges? This is double the amount the Taoiseach repeatedly stated would be the average charge per household. The Minister for Public Expenditure and Reform, Deputy Howlin, also announced a water subsidy worth €100 per year to those on the household benefits package and fuel allowance. However, almost 200,000 people who are short-term unemployed or who do not earn enough to pay tax are excluded from the measure. They were not included in the tax reliefs outlined by the Minister for Finance. Rather than Mickey Mouse measures, why does the Taoiseach not accept the inevitability of abolishing water charges and do so?

We have no intention of abolishing water charges. The setting up of Irish Water to deal with the provision of water to everyone, including business and consumers, with proper standards and infrastructure has been neglected for far too long. The Government has provided a subsidy to Irish Water of between €550 million and €600 million, which is for every household in the country. This is a household charge. In addition, the allowance of 30,000 litres per household and 21,000 litres per child applies to every household and every child in the country. Beyond that, other conditions apply to people with medical conditions. Those charges are capped.

In addition, the two other benefits announced by the Department of Social Protection for those in receipt of the household benefits package means that, between the tax credit available and other facilities from the Department of Social Protection, they will cover the vast majority of households in the country. From that point of view, I agree that the changes made yesterday were modest. They were never intended to be extravagant and we are not in the position to write blank cheques. In terms of the tax position, what is involved is the first of a three-year programme of changing the income tax system to demonstrate that it pays to work, that work is rewarded, that workers are rewarded and those not in employment have the opportunity to come off the live register and get into the world of work. As they progress up the line from low-paid to middle income earners, that is where the priority of the Government has been. In the next budget at the end of 2015, and if the people decide to re-elect this Government in 2016, the same measures will apply to income tax changes. It is designed to lessen the burden on people, make it more obvious that work pays and ensure that people have a sense of extra money and confidence to invest and spend in their communities. In this way, we can build a society and the kind of country that we know we can have.

Some families will receive bills of up to €500. If they get tax relief of €100, they will be faced with a new austerity tax of €400. An old-age pensioner living alone faces a new austerity tax of €70 or €80 if he or she receives €100 from the Government. We are subsidising a private limited company set up by the Government to raise €500 million and now the State will subsidise the same company with €500 million or €600 million of a subsidy. This is economic madness.

Whatever measures were introduced for the short-term unemployed, this is a tax they cannot afford. That was the message sent out last Saturday when nearly 100,000 people came out from Dingle to Donegal, from Gorey to Galway and from Dublin. They said they would not be able to pay the tax. It was a simple message. One placard said that when the bill comes through the door in January and there is a choice between paying the water tax and feeding the kids, that person would be feeding the kids. That is the message the Taoiseach must take from the protest and the by-elections. Anti-austerity and anti-water-tax candidates took those seats. This is not about elections but about what people have left in their pockets. Any gain in direct taxation has been wiped out by the austerity tax of water. Will the Taoiseach accept the inevitable? On 1 November, people are coming back out onto the streets. We will see if they come out in their hundreds of thousands as they did last Saturday. I hope it sends a clear message to the Government that the tax must be abolished.

That is why the priority of the Government has been to focus on middle and lower income earners, from €70,000 down, and why the rate of tax was changed. The band has been changed and we have taken another 80,000 people from the universal social charge, USC, net completely. That means that 410,000 people do not have to pay the USC. Two rates of USC have been reduced to help lower paid workers. In addition, there is the household benefits package, while those with a tax liability can claim a tax credit. That is the start of a three year programme in respect of income tax in order that people can be rewarded for the work they do and an extra burden can be relieved, which means that they can spend more in their own communities.

I understand the challenge any introduced charge brings for many. We have tried to make this as affordable, fair and equitable as possible in the interests of providing proper facilities and high quality water for the entire country. It is different in many places in rural Ireland, where people may have paid for water for years because of the necessity to engage in pipework and so on, instead of having to bore wells on bad land, for example. Therefore, it is an issue. We have tried to make it fair, affordable and equitable, as we need to invest in and fix infrastructure and repair treatment works. In this city we do not want to lose 40% of water through leaks and cannot go on like that. The changes are being made to contribute to the system and they are to be fair and affordable. We will help people in the introduction of changes where they apply.